Indian Hotels Company Ltd's Ginger Hotels will invest more than Rs 204 crore to set up 17 budget hotels in tier-II cities in the next 12 months.

"In the next 12 months, the total number of Ginger hotels will go up to 25 from the current eight. Each 100-room Ginger hotel on an average will be set up at a cost of Rs 11-12 crore, excluding the land cost, which varies from city to city," Mr Prabhat Pani, CEO, Roots Corporation, which operates the Ginger gen-next 'smart-basics' hotels chain, said.

Roots Corporation is a 100 per cent subsidiary of Indian Hotels Company Ltd (IHCL), which also promotes the Taj Group of hotels. The investment would be financed by a mix of debt and internal accruals. "We are not looking at raising any private equity," he said.

The hotels would come up on less than one acre land each in cities such as Ludhiana, Pantnagar, Agartala, Pondicherry, Guwahati and Baroda, Mr. Pani said.

The eight Ginger hotels are in Nasik, Pune, Bangalore, Mysore, Thiruvananthapuram, Bhubaneshwar, Haridwar and Durgapur in West Bengal.

"The expansion in the number of budget hotels will bring us to the fore front. Since there are hardly any players in this space, we hold a large portion of the market share," Mr. Pani said.

He said Delhi's Rail Yatri Niwas, for which Roots had recently won the privatisation bid conducted by Indian Railways, would also be brought under the Ginger brand.

Ginger Hotels has inked a partnership agreement with Cafe Coffee Day, whose outlets would be rolled out in its hotels on an average of 200-600 sq ft.

Roots Corporation had launched the IndiaOne hotels in June 2004 in Bangalore, which was later renamed under the "smart basics" banner to Ginger.